Chapter 3 - The accounting information system. After studying this chapter, you should be able to: Understand basic accounting terminology; explain double-entry rules; identify steps in the accounting cycle; record transactions in journals, post to ledger accounts, and prepare a trial balance;. | PREVIEW OF CHAPTER 3 Intermediate Accounting 16th Edition Kieso ● Weygandt ● Warfield Understand the basic accounting information system. Record and summarize basic transactions. Identify and prepare adjusting entries. LEARNING OBJECTIVES Prepare financial statements from the adjusted trial balance. Prepare closing entries. Prepare financial statements for a merchandising company. After studying this chapter, you should be able to: The Accounting Information System 3 LO 1 Accounting information system Collects and processes transaction data. Disseminates the financial information to interested parties. ACCOUNTING INFORMATION SYSTEM LO 1 Helps management answer such questions as: How much and what kind of debt is outstanding? Were sales higher this period than last? What assets do we have? What were our cash inflows and outflows? Did we make a profit last period? Are any of our product lines or divisions operating at a loss? Can we safely increase our dividends to stockholders? Is our rate of return on net assets increasing? ACCOUNTING INFORMATION SYSTEM LO 1 Journal Posting Trial Balance Adjusting Entries Financial Statements Closing Entries Basic Terminology Event Transaction Account Real Account Nominal Account Ledger ACCOUNTING INFORMATION SYSTEM LO 1 An account shows the effect of transactions on a given asset, liability, equity, revenue, or expense account. Double-entry accounting system (two-sided effect). Recording done by debiting at least one account and crediting another. DEBITS must equal CREDITS. Debits and Credits ACCOUNTING INFORMATION SYSTEM LO 1 Debits and Credits An arrangement that shows the effect of transactions on an account. Debit = “Left” Credit = “Right” Account An Account can be illustrated in a T-Account form. LO 1 $10,000 Transaction #2 $3,000 $15,000 8,000 Balance Transaction #1 Transaction #3 If the sum of Debit entries are greater than the sum of Credit entries, the account will have a debit balance. Debits and Credits LO 1 If the sum | PREVIEW OF CHAPTER 3 Intermediate Accounting 16th Edition Kieso ● Weygandt ● Warfield Understand the basic accounting information system. Record and summarize basic transactions. Identify and prepare adjusting entries. LEARNING OBJECTIVES Prepare financial statements from the adjusted trial balance. Prepare closing entries. Prepare financial statements for a merchandising company. After studying this chapter, you should be able to: The Accounting Information System 3 LO 1 Accounting information system Collects and processes transaction data. Disseminates the financial information to interested parties. ACCOUNTING INFORMATION SYSTEM LO 1 Helps management answer such questions as: How much and what kind of debt is outstanding? Were sales higher this period than last? What assets do we have? What were our cash inflows and outflows? Did we make a profit last period? Are any of our product lines or divisions operating at a loss? Can we safely increase our dividends to stockholders? Is our
